January 26, 1997
WHAT STARTED as a jobs-growth bill has now turned into a giveaway contest. Everyone in the Maryland State House suddenly wants to ease the income-tax burden, but no one can agree on how to pay for it, who should receive most of the relief and whether the state can even afford to cut taxes. You need a program to figure out all the players in this confusion.
Gov. Parris N. Glendening wants a 10-percent cut in the rate to signal corporate America that Maryland is serious about easing its tax burden. His economic advisers claim this will mean 5,000 new jobs a year.
But Senate Democrats on the budget panel warn his plan rewards the rich. They want a tax cut that raises individual exemptions without lowering the 5 percent rate, thus giving more relief to poorer Marylanders.
Meanwhile, Republicans abandoned the pro-business posture of their 1994 standard-bearer, Ellen R. Sauerbrey, in favor of a populist approach -- a "poor folks tax cut" similar to Senate Democrats', only far costlier.
Then Senate President Mike Miller dropped a bombshell -- slot machines at state race tracks to pay for a 10 percent income tax cut.
And finally, House Speaker Casper Taylor offered a 10 percent tax reduction, supported by levies on telecommunications firms and HMOs.
Lost in this maneuvering is the original reason Ms. Sauerbrey backed an income-tax cut and Governor Glendening now seeks a reduction, too: Maryland's damaging reputation in the corporate world as a "high-tax" state.
A lower income-tax rate is the best way to signal a change. Without a lower rate, any tax bill would be meaningless in terms of jobs.
The No. 1 objective of lawmakers must be a tax cut that leads to more jobs. Anything else is unacceptable.
Some plans don't add up. The Republicans' proposal and the Senate Democrats' proposal fail to detail how the state will pay for a tax cut. The governor's plan flunks, too, because it leaves a budget hole four years out.
Only Mr. Taylor and Mr. Miller provide sufficient funds for a responsible tax cut. But the Senate president's approach runs up against the governor's vehement opposition to slots and fears that this is the opening wedge for casino gambling in downtown Baltimore, Cambridge, Cumberland, Elkton, etc.
That leaves the Taylor bill as the best hope. HMOs are already sounding the alarm. But lawmakers should not be fooled. They must focus on the prize: A lower income-tax rate that draws businesses -- and jobs -- to Maryland.
Pub Date: 1/26/97
